“(zc)20a decision of the Commissioners about the application of any provision of regulations under paragraph 2 or 6 of Schedule 11, or of regulations under section 135 or 136 of the Finance Act 2002 relating to VAT, which—

(i)requires returns to be made or information to be 25submitted by electronic communications, or

(ii)requires records to be kept or preserved in electronic form,

(including in particular a decision as to whether such a requirement applies and a decision to impose a penalty).””

(6)30Subsections (3)(a) and (4) of this section come into force when the first regulations under paragraph 6(5) of Schedule 11 to VATA 1994 come into force.

(7)Regulations under paragraph 6(5) of Schedule 11 to VATA 1994 may not make provision requiring records to be kept or preserved in electronic form which 35has effect before 1 April 2019.

63Partial closure notices

40Avoidance etc

64Errors in taxpayers’ documents

(1)Schedule 24 to FA 2007 (penalties for errors) is amended as set out in subsections (2) and (3).

Finance BillPage 81

(2)After paragraph 3 insert—

““Errors related to avoidance arrangements

3A(1)This paragraph applies where a document of a kind listed in the Table in paragraph 1 is given to HMRC by a person (“P”) and the 5document contains an inaccuracy which—

(a)falls within paragraph 1(2), and

(b)arises because the document is submitted on the basis that particular avoidance arrangements (within the meaning of paragraph 3B) had an effect which in fact they did not have.

(2)10It is to be presumed that the inaccuracy was careless, within the meaning of paragraph 3, unless—

(a)the inaccuracy was deliberate on P’s part, or

(b)P satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that P took reasonable care to avoid inaccuracy.

(3)15In considering whether P took reasonable care to avoid inaccuracy, HMRC and (on an appeal notified to the tribunal) the tribunal must take no account of any evidence of any reliance by P on advice where the advice is disqualified.

(4)Advice is “disqualified” if any of the following applies—

(a)20the advice was given to P by an interested person;

(b)the advice was given to P as a result of arrangements made between an interested person and the person who gave the advice;

(c)the person who gave the advice did not have appropriate 25expertise for giving the advice;

(d)the advice took no account of P’s individual circumstances;

(e)the advice was addressed to, or given to, a person other than P;

but this is subject to sub-paragraphs (5) and (7).

(5)30Where (but for this sub-paragraph) advice would be disqualified under any of paragraphs (a) to (c) of sub-paragraph (4), the advice is not disqualified under that paragraph if at the relevant time P—

(a)has taken reasonable steps to find out whether the advice falls within that paragraph, and

(b)35reasonably believes that it does not.

(6)In sub-paragraph (4) “an interested person” means—

(a)a person, other than P, who participated in the avoidance arrangements or any transaction forming part of them, or

(b)a person who for any consideration (whether or not in 40money) facilitated P’s entering into the avoidance arrangements.

(7)Where (but for this sub-paragraph) advice would be disqualified under paragraph (a) of sub-paragraph (4) because it was given by a person within sub-paragraph (6)(b), the advice is not disqualified 45under that paragraph if—

(2)Arrangements fall within this sub-paragraph if, having regard to all 35the circumstances, it would be reasonable to conclude that the obtaining of a tax advantage was the main purpose, or one of the main purposes, of the arrangements.

(3)Arrangements are not avoidance arrangements for the purposes of paragraph 3A if (although they fall within sub-paragraph (2))—

(a)40they are arrangements which accord with established practice, and

(b)HMRC had, at the time the arrangements were entered into, indicated its acceptance of that practice.

(4)If, at any time, any of Conditions A to E is met in relation to particular 45arrangements—

(a)for the purposes of this Schedule the arrangements are to be taken to fall within (and always to have fallen within) sub-paragraph (2), and

Finance BillPage 83

(b)in relation to the arrangements, sub-paragraph (3) (and the reference to it in sub-paragraph (1)) are to be treated as omitted.

This does not prevent arrangements from falling within sub-5paragraph (2) other than by reason of one or more of Conditions A to E being met.

(5)Conditions A to E are as follows—

(a)Condition A is that the arrangements are DOTAS arrangements within the meaning given by section 219(5) 10and (6) of FA 2014;

(b)Condition B is that the arrangements are disclosable VATarrangements or disclosable indirect tax arrangements for the purposes of Schedule 18 to FA 2016 (see paragraphs 8A to 9A of that Schedule);

(c)15Condition C is that both of the following apply—

(i)P has been given a notice under a provision mentioned in sub-paragraph (6) stating that a tax advantage arising from the arrangements is to be counteracted, and

(ii)20that tax advantage has been counteracted under section 209 of FA 2013;

(d)Condition D is that a follower notice under section 204 of FA 2014 has been given to P by reference to the arrangements (and not withdrawn) and—

(i)25the necessary corrective action for the purposes of section 208 of FA 2014 has been taken in respect of the denied advantage, or

(ii)the denied advantage has been counteracted otherwise than as mentioned in sub-paragraph (i);

(e)30Condition E is that a tax advantage asserted by reference to the arrangements has been counteracted (by an assessment, an amendment of a return or claim, or otherwise) on the basis that an avoidance-related rule applies in relation to P’s affairs.

(b)paragraph 8 or 9 of Schedule 43A to that Act (pooled or bound arrangements: notice of final decision);

(c)40paragraph 8 of Schedule 43B to that Act (generic referrals: notice of final decision).

(7)In sub-paragraph (5)(d) the reference to giving a follower notice to P includes giving a partnership follower notice in respect of a partnership return in relation to which P is a relevant partner; and for 45the purposes of this sub-paragraph—

(a)“relevant partner” has the meaning given by paragraph 2(5) of Schedule 31 to FA 2014;

(8)For the purposes of sub-paragraph (5)(d) it does not matter whether the denied advantage has been dealt with—

(a)wholly as mentioned in one or other of sub-paragraphs (i) and (ii) of sub-paragraph (5)(d), or

(b)5partly as mentioned in one of those sub-paragraphs and partly as mentioned in the other;

and “the denied advantage” has the same meaning as in Chapter 2 of Part 4 of FA 2014 (see section 208(3) of and paragraph 4(3) of Schedule 31 to that Act).

(9)10For the purposes of sub-paragraph (5)(e) a tax advantage has been “asserted by reference to” the arrangements if a return, claim or appeal has been made by P on the basis that the tax advantage results from the arrangements.

(10)In this paragraph—

15“arrangements” has the same meaning as in paragraph 3A;

“avoidance-related rule” has the same meaning as in Part 4 of Schedule 18 to FA 2016 (see paragraph 25 of that Schedule);

a “tax advantage” includes—

(a)

relief or increased relief from tax,

(b)

20repayment or increased repayment of tax,

(c)

avoidance or reduction of a charge to tax or an assessment to tax,

(d)

avoidance of a possible assessment to tax,

(e)

deferral of a payment of tax or advancement of a 25repayment of tax,

(f)

avoidance of an obligation to deduct or account for tax, and

(g)

in relation to VAT, anything which is a tax advantage for the purposes of Schedule 18 to FA 2016 under 30paragraph 5 of that Schedule.””

(3)In paragraph 18, after sub-paragraph (5) insert—

“(6)Paragraph 3A applies where a document is given to HMRC on behalf of P as it applies where a document is given to HMRC by P (and in paragraph 3B(9) the reference to P includes a person acting on behalf 35of P).””

66Disclosure of tax avoidance schemes: VAT and other indirect taxes

(2)In consequence of the provision made by Schedule 17, section 58A of, and Schedule 11A to, VATA 1994 (disclosure of VAT avoidance schemes) cease to have effect to require a person to disclose any scheme which—

(a)10is first entered into by that person on or after 1 January 2018,

(b)constitutes notifiable arrangements under Schedule 17,

(c)implements proposals which are notifiable proposals under Schedule 17.

(3)No scheme or proposed scheme may be notified to the Commissioners under 15paragraph 9 of Schedule 11A to VATA 1994 (voluntary notification of schemes) on or after 1 January 2018.

(4)This section and Schedule 17 come into force—

(a)so far as is necessary for enabling the making of regulations under that Schedule, on the passing of this Act, and

(b)20for all other purposes, on 1 January 2018.

67Requirement to correct certain offshore tax non-compliance

Schedule 18 makes provision for and in connection with requiring persons to correct any offshore tax non-compliance subsisting on 6 April 2017.

as developed or extended by that Court (whether before or after the 20coming into force of this section) in other cases relating to the denial or refusal of a VAT right in order to prevent abuses of the VAT system.

(7)The penalty payable under this section is 30% of the potential lost VAT.

(8)The potential lost VAT is—

(a)the additional VAT which becomes payable by T as a result of 25the denial decision,

(b)the VAT which is not repaid to T as a result of that decision, or

(c)in a case where as a result of that decision VAT is not repaid to T and additional VAT becomes payable by T, the aggregate of the VAT that is not repaid and the additional VAT.

(9)30Where T is liable to a penalty under this section the Commissioners may assess the amount of the penalty and notify it to T accordingly.

(10)No assessment of a penalty under this section may be made more than two years after the denial decision is issued.

(11)The assessment of a penalty under this section may be made 35immediately after the denial decision is made (and notice of the assessment may be given to T in the same document as the notice of the decision).

(12)Where by reason of actions involved in making a claim to exercise or rely on a VAT right in relation to a supply T—

(a)40is liable to a penalty for an inaccuracy under paragraph 1 of Schedule 24 to the Finance Act 2007 for which T has been assessed (and the assessment has not been successfully appealed against by T or withdrawn), or

(b)is convicted of an offence (whether under this Act or otherwise),

45those actions do not give rise to liability to a penalty under this section.

69DPenalties under section 69C: officers’ liability

(1)Where—

Finance BillPage 87

(a)a company is liable to a penalty under section 69C, and

(b)the actions of the company which give rise to that liability were attributable to an officer of the company (“the officer”),

the officer is liable to pay such portion of the penalty (which may be 5equal to or less than 100%) as HMRC may specify in a notice given to the officer (a “decision notice”).

(2)Before giving the officer a decision notice HMRC must—

(a)inform the officer that they are considering doing so, and

(b)afford the officer the opportunity to make representations about 10whether a decision notice should be given or the portion that should be specified.

(3)A decision notice—

(a)may not be given before the amount of the penalty due from the company has been assessed (but it may be given immediately 15after that has happened), and

(b)may not be given more than two years after the denial decision relevant to that penalty was issued.

(4)Where the Commissioners have specified a portion of the penalty in a decision notice given to the officer—

(a)20section 70 applies to the specified portion as to a penalty under section 69C,

(b)the officer must pay the specified portion before the end of the period of 30 days beginning with the day on which the notice is given,

(c)25section 76(9) applies as if the decision notice were an assessment notified under section 76, and

(d)a further decision notice may be given in respect of a portion of any additional amount assessed in an additional assessment.

(5)HMRC may not recover more than 100% of the penalty through issuing 30decision notices in relation to two or more persons.

(6)A person is not liable to pay an amount by virtue of this section if the actions of the company concerned are attributable to the person by reference to conduct for which the person has been convicted of an offence.

35In this subsection “conduct” includes omissions.

(7)In this section “company” means a body corporate or unincorporated association but does not include a partnership, a local authority or a local authority association.

(8)In its application to a body corporate other than a limited liability 40partnership “officer” means—

(a)a director (including a shadow director within the meaning of section 251 of the Companies Act 2006),

(b)a manager, or

(c)a secretary.

(9)45In in its application to a limited liability partnership “officer” means a member.

(10)In its application in any other case, “officer” means—

Finance BillPage 88

(a)a director,

(b)a manager,

(c)a secretary, or

(d)any other person managing or purporting to manage any of the 5company’s affairs.

69EPublication of details of persons liable to penalties under section 69C

(1)The Commissioners may publish information about a person if—

(a)in consequence of an investigation the person has been found liable to one or more penalties under section 69C (the amount of 10which has been assessed), and

(b)the potential lost VAT in relation to the penalty (or the aggregate of the potential lost VAT in relation to each of the penalties) exceeds £50,000.

(2)The information that may be published under subsection (1) is—

(a)15the person’s name (including any trading name, previous name or pseudonym),

(b)the person’s address (or registered office),

(c)the nature of any business carried on by the person,

(d)the amount of the penalty or penalties in question,

(e)20the periods or times to which the actions giving rise to the penalty or penalties relate,

(f)any other information that the Commissioners consider it appropriate to publish in order to make clear the person’s identity.

(3)25In a case where—

(a)the requirements in subsection (1)(a) and (b) are met in relation to a penalty or penalties for which a company is liable,

(b)information about the company is published by virtue of this section,

(c)30a person (“the officer”) has been given a decision notice under section 69D specifying a portion of the penalty (or, if there is more than one penalty, of any of the penalties) payable by the company as a portion which the officer is liable to pay, and

(d)the amount (or, if the decision notice specifies portions of more 35than one penalty, the aggregate amount) which the officer is liable to pay under the decision notice exceeds £25, 000,

the Commissioners may publish information about the officer.

(4)The information that may be published under subsection (3) is—

(a)the officer’s name,

(b)40the officer’s address,

(c)the officer’s position (or former position) in the company,

(d)the amount of any penalty imposed on the company of which a portion is payable by the officer under the decision notice and the portion so payable,

(e)45the periods or times to which the actions giving rise to any such penalty relate,

Finance BillPage 89

(f)any other information that the Commissioners consider it appropriate to publish in order to make clear the officer’s identity.

(5)Information published under this section may be published in any 5manner that the Commissioners consider appropriate.

(6)Before publishing any information under this section the Commissioners must—

(a)inform the person or officer to which it relates that they are considering doing so (in the case of an officer, on the 10assumption that they publish information about the company), and

(b)afford the person or officer the opportunity to make representations about whether it should be published.

(7)No information may be published under subsection (1) before the day 15on which the penalty becomes final or, where more than one penalty is involved, the latest day on which any of the penalties becomes final.

(8)No information may be published under subsection (1) for the first time after the end of the period of one year beginning with that day.

(9)No information may be published under subsection (3) before 20whichever is the later of—

(a)the day mentioned in subsection (7), and

(b)the day on which the decision notice given to the officer becomes final.

(10)No information may be published under subsection (3) for the first time 25after the end of the period of one year beginning with the later of the two days mentioned in subsection (9).

(11)No information may be published (or continue to be published) under subsection (1) or (3) after the end of the period of three years beginning with the day mentioned in subsection (7).

(12)30For the purposes of this section a penalty or a decision notice becomes final when the time for any appeal or further appeal relating to it expires or, if later, any appeal or final appeal relating to it is finally determined.

(13)The Treasury may by regulations made by statutory instrument—

(a)35amend subsection (1) to vary the amount for the time being specified in paragraph (b), or

(b)amend subsection (3) to vary the amount for the time being specified in paragraph (d).

(14)A statutory instrument containing regulations under subsection (13) is 40subject to annulment in pursuance of a resolution of the House of Commons.””